Google-Deloitte report forecasts sluggish growth for Indian fantasy sports industry year after GST blow

The outlook for the industry, as estimated by Google India and Deloitte, appears grim when seen in the context of a different joint report by Deloitte and Fantasy Sports Federation of India (FIFS) that was released before the 28% tax went into effect. This April 2023 report had projected a 30% CAGR for the Indian fantasy sports market by FY 2027.

When asked about the impact of the new taxation and legal issues on Indian fantasy sports apps, Prashanth Rao, a partner at Deloitte, said that these factors had put the brakes on the industry. “It was flying at a very fast pace, but we expect that there will be a slight bit of recollection time at this point as the industry reorganises itself,” Rao told indianexpress.com.

(Left to right) Sports presenter Mandira Bedi with Roma Datta Chobey, Google India MD; Sujata Chaturvedi, Secretary Sports, Govt of India; Romal Shetty, CEO, Deloitte Southeast Asia. (Image credit: Google)

Interestingly, the Think Sports report released at an event in Delhi on Thursday, November 14, counts fantasy sports and e-sports as one of the core sub-sectors fuelling India’s sporting economy.

It has also projected that more Indian users will play online games on fantasy sports apps. India’s Fantasy Sports player base is set to hit 430 million users by the end of the decade, as per the report.

“Major FS players have absorbed the impact of the GST hikes on player deposits. The industry has seen a slowdown, which is likely to continue for the short to medium-term,” the report said.

“Leading FS platform Dream11 saw ~80% YoY growth in female users,” it added.

In terms of user behaviour, the report states that video games and fantasy sports apps are seeing deepening fan engagement, with 1 in 2 users being fanatics about such activities as opposed to 1 in 3 users who just participate casually.

Number of fantasy sports users. (Screenshot: Google-Deloitte report)

However, the report does not acknowledge rising concerns over online gaming addiction among youngsters. Earlier this year, it was reported that the central government was eyeing “China-like” time limits and curbs in an attempt to tackle addiction.

On funding, the report found that fantasy sports companies secured the second highest share of investments after team acquisitions. Dream Sports, the parent company of Dream 11, has reportedly raised over $1.4 billion in the past four years.

E-sports to grow by 25% by 2030

The E-sports industry in India is expected to witness a CAGR of 25% from $40 million to $200 million by FY 2030, according to the report.

“Between 2020 and 2023, the number of esports players and teams leapt by 733% and 108%, respectively, reflecting the country’s mounting participation in the sport,” the report said, adding that the number of esport tournaments have increased by 67% over the same period.

This has further led to a 122% increase in the number of brands investing in esports, as per the report.

Other trends and insights

The Think Sports report by Google and Deloitte estimates that the entire Indian sports ecosystem will be worth $130 billion by 2030, creating 10.5 million jobs and contributing $21 billion in indirect tax revenue.

“This growth, a 14% CAGR – nearly double the pace of India’s GDP – signifies a fundamental shift in how Indians consume and engage with sports, driven by increasing government investments, a rising trend of multi-sport culture, wide digital adoption, and a range of quality sports content,” the two tech giants said in a joint statement.

The report also provides a glimpse of how sports consumption is being transformed with the rising popularity of digital platforms like YouTube. “Today, 93% of Gen Z fans consume sports content digitally and more than any other generation,” the report said.

Additionally the sports tech sector is projected to be worth $1 billion at an estimated 19% CAGR driven by fan engagement and innovation.